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As an Tax Accountant for 11 years, managed a commercial strata as an accountant for 6 years this information incorrect.
GST is registered if the strata has a turnover greater than $75,000. Even if all the income of the strata is just Strata Levies if the total sales are greater than $75,000 then the Strata needs to be registered. But remember that means 10% of levies go to the ATO, this will mean a dip in the strata funds, this tends to mean if the budget is done correctly (and depending on the expenses) the levies will increase by 10%.
To register for GST the Strata must have an ABN – this is generally done upon registration of the Strata. Registering for GST requires simply the Strata legal trading name and the ABN. This is a simple 2 minute process for a tax agent or 20 minutes on the phone for the strata manager. It does not require an TFN, any personal details of the owners corp, owners, tenants no one.
Hope this helps.
The investors would only be able to claim any deduction if they contributed funds to cover the expenses. If the funds to pay the legal fees came out of the existing fund, (the standard levies contributed) the no additional tax deduction can be claimed. You can claim the quarterly levies as normal, but not the expenses of the Strata if no additional funds were contributed. No contribution no deduction.
If funds were contributed to cover the expenses generally only the legal fees portion of the contribution are tax deductible. Under the tax act fines are not an allowable deduction, but you may want to check this as this area of the tax act is always changing.
if you have an accountant I would check with them first before claiming anything.
I have been in your position and what Lady Penelope says below is the right course of action.
Make a diary of the music and make sure this is submitted to the council, also ask the council to ensure the letters of complaint go the registered owners (parents) just just to the kid.
Also ring the police and get the call number and make a note, enough calls and they will put them on a watch list. even if you give them the parents address (should be on the title register), then this might give them another way to get the situation resolved. I did this and the police contacted the parents (after the kid moved out) and they did not know letters and complaints had been received with the council.
Also talk to others in the strata and get them to make a list too. The more people the better your odds are, trust me.
You have to get the parents involved and make sure that as the owner all consequences fall on to them.
In the mean time see if there are other things they are doing that may violate council rules. I got rid of my pest after i complained about his dogs, two unregistered pets on the property (four in total). I made a noise log and submitted it, the kid was fines for failure to register the pets. They only did one and then left.
While i do not recommend leaving the stereo on all night. ( I must admit there were times i thought he was worth the jail time), there is a reason Barry White and Barry Manalow are played on loop at the Train Stations.
Hi, I am a tax accountant and can tell you:
As a general rule, if the intention was a repair and the replacement was of a similar type (ie replacing lino with lino, not replace lino with timber floor boards) then it will normally be an out right deduction for the items you list.
What would not be out rightly deductible would be replacing the roof. Even if it got damaged and the decision was to replace the entire roof, then the cost was have to be depreciated as a capital cost. You still get a tax deduction for the cost out layed, but over many years.
As a side note and strata related. If there is a special levy raised (no matter how small or large) that is capital in nature (ie replacing the roof), the cost of the levy to you must be depreciated, you can not claim the cost of the special levy outright. Even though the cost is the strata’s the monies you put in must be depreciated, not claimed just as a normal body corporate expense.
But as Scotland explains, bring the items to your accountant to cross check.
Speaking from experience, they tend to act in self interest and simply want to get something out of it, rather than what is best for the strata.
Just to add to JimmyT’s comments.
If you do choose to go ahead with an onsite manager, make sure that you also look at insurance, statement of duties, how they will be paid (wages or contract). This adds all sorts of legal & insurance implications. It also costs your time, other committee members time and strata manager costs.
Also any contract to be done up independently of this person so no bias. Also the invoices they send you must be proper invoices, conforming to ATO standards. Also make sure you are able to contact this person and hold them account of there work.
Also you may want to look at a competitive tender process. That way you can honestly say this is the best person for the position. Get a proper signed contract then you can hold them account for their actions.
I live in a townhouse (in WA), that has timber solid jarrah flooring throughout. There is only carpet on the upstairs landing, and bedrooms. My neighbour who I have a common wall with has the same layout.
I can tell you that Jimmy is right about the noise and the tenants/owners attitude. I went from a noisy little brat who with loud base music I could feel the base under my feet throughout my house and hear them go up and down the stairs to even opening a closing doors. I have new neighbours and apart from the front gate I never hear boo from. I don’t hear any music and I do not hear them walking around or going up stairs or opening and closing doors.
The main issue (apart from having rules in place and proper insulation) from personal experience is making sure that when noise occurs that the people living their change their habits and attitudes to be more mindful of others. Noise living in such close quarters is expected, but some noise is attitude based ie loud music at 3am. But also having a EC and Manager willing to enforce the rules
Hi Dudley,
If the Strata Manager has had Tax Returns lodged in the past surely a copy can easily be supplied to the owners? If not I would ask for a copy (under the Tax Act you are required to keep copies of documents and Tax Returns for 5 years). There should not be a charge or supplying documents you should have been given a copy for. My understanding (and anyone feel free to correct me) is that the EC is simply a smaller group of the OC who make the final decisions in the best interests of the Strata, they are not special or different in any way. This would fall under the same category under the strata act or being able to request documents from the Strata Manager relating to the Strata Act.
If a Tax Agent has been used under the Tax Act the Tax Agent is required to provide a copy of the return to the person. If a registered Tax Agent has not been used and the Manager is trying to pull the wool over your eyes and they have prepared the return (ie charging extra) then not getting an owner to sign the Tax Return before lodging the return or providing a copy is could be considered a breach of the act. You are part of the Strata and therefore technically required to be given a copy of the return. You may not be able to ring the Tax Agent directly as they may not have you listed as a person related to this strata. It would breach privacy rules for the Tax Agent.
The Strata Name could unfortunately be a few different ways with the Tax Office. This will all depend on the person who registered the Strata Plan in the first place. It could be “The Owners of Strata Plan xxxx” It could be “(Strata Name) Plan (plan Number). Just put Strata Plan (name of strata plan) into the ABN LookUp Site and it should find it. It has the location State and Postcode, so this will help narrow the search.
I would first call/email the Strata Manager and ask for a copy of the last Tax Return lodged. If they advise they do not have a copy advise them that they are required to keep copies of returns for 5 years under the Tax Act. This might shock them into some action if can throw the law back at them. It may also give you some reasons to kick them out if the other owners agree – that they are not good at keeping records. If they can not provide a copy I would be asking some hard questions as to why. There simply is no reason why you can not have a copy of the Tax Return as an owner.
I would fill out as much as you can, and bring to the AGM (if you do not get any additional information from the Strata Manager first) surely the other owners would not complain at the idea of a person doing free work for them. I would not. Advise them this will sort out the need to visit this issue each year. Push the point of saving money, and their time. People are always going to invest in things that benefit them/make their life easier.
Sorry to ramble, but I felt that it was important to give you all the information.
Hope this helps. Happy to answer any further queries.
Hi Dudley,
You are only required to report income that is non-mutual income, such as interest earned on a bank account. Since your only income is Strata Levies, this is considered mutual income, therefore not reportable to the Tax Office and no tax need be paid.
Link to explanation of non-mutual income – https://www.ato.gov.au/law/view/document? DocID=TXR/TR20153/NAT/ATO/00001
This is a tax ruling showing what a strata corporate body should include as income. Just for your information.
As for the requirement to lodge a return each year, you can order a paper copy from the tax office – you can use the online ordering service, ring up or go into a tax office store front and ask for a paper copy of the 2016 Strata Tax Return. Link – https://www.ato.gov.au/forms/strata-title-body-corporate-tax-return-and-instructions-2016/?page=1#How_to_obtain_this_publication.
What I would do (to sort it out once and for all), is get a copy of the form, find the ABN of the Strata Company – (Google search “ABN Lookup”), get the TFN for the Strata (you may need to ask the Strata Manager) and fill out the return as all zeroes. On the front page of the form it will ask you “Final Tax Return”, put a Y for Yes in this box. When and if you situation changes and you have mutual income, you can then lodge a tax return if required. Until this happens the Tax Office will assume you have no requirement to lodge a tax return and you will not need to or be hassled by the Tax Office to lodge a return. Make sure you make a copy of the form. The Tax Office may send you out a statement of income tax account, it will simply show the return as lodged with no tax due.
I understand you may need to talk to the EC or OC about this but it is the best and easiest option, rather than every year going through the hopes with the strata manager.
I work as a Tax Accountant and we prepare Strata Tax Return for a strata that requires a return to be lodged each year. However it really is only 5 minutes work. If you strata manager is outsourcing this job to an accounting firm they maybe changing you hundreds of dollars for something that takes minutes.
Hope this helps
If you live in the property then no. If you run a business from home than you can claim % of your home as work related and therefore claim the house expenses. However this will then count against you when you sell the home and will attract capital gains tax. Also as PeterC states if you are renting out a room then you can claim a portion of the expenses. Talk to the ATO or your accountant before you think about this option.
Generally people only claim home office expenses such as office furniture and electricity if they work from home.
if you own the property and rent it out then the strata levies are tax deductible. However if the strata raises a special levy that fixes something that is capital in nature such as the roof then this is not out rightly deductible. It must be depreciated. For example if your portion of the levy was $10,000, then this is depreciated at 2.5% each year until you sell the property, stop renting it out or you live in the property.
As for anything else that is deductible go to the ATO website.
talk to your accountant or the ATO before you start claiming anything.
Information from the Australian Taxation Office can be found HERE. – Whale –
TMK,
With strata living their is always some give and take and the older the building the worse the noise will be. I can hear my neighbour going up a down his stairs. The stairs are solid jarrah in both my place and the rest of the strata. While it is unpleasant and not something I want to hear it would be unreasonable of me to expect him to stop using his stairs while I sleep.
Most noise diary’s should have a date, time or time period, what is actually the noise is. For example if you are putting up with loud foot steps due to noising footwear on hard wood floors, note the date, time or time period and put down that you can clearly hear walking (with heels) on hardwood floors. Put down where you are in your place, note if you have any doors or windows open and if you have music or television going. The more information and detail you give the better chance you have of being taken seriously about your complaint. If the noise is say once or twice a week for a few minutes at a time this may be something that is considered normal everyday living for apartments.
Most local councils have on their website an example of a noise dairy if a neighbour is causing a noise problem.
As for noise readings I have been down this path with my local council about my neighbours loud music and have been basically told unless the police come out and determine the music is excess there is nothing more they can do. Any noise readings I take myself would not be valid in my complaint. I am not sure (depending on your state) what the police, council or strata complaint board (depending on your state) view would be and worth checking out.
Hope this helps
I have let down tyres on a neighbour before. Ruined their day completely!
In my defence they always park their car on the verge common property/path walkway. They are a nuisance to everyone else just thought I would return the favour!